2017 - Q1 Supplemental/media/Files/B/... · • Net loss attributable to Brookfield shareholders was $37 million or $0.08 per share, which is after the allocation of income to non-controlling

1

• Invested and committed $17 billion on a last twelve months ("LTM") basis, including $3 billion of capital in the first quarter. Significant transactionsincluded:

– Committed approximately $2 billion of capital to acquire two global renewable power portfolios, a U.K. fuel distributor and a Canadian gasstation portfolio.

– Completed our investment in a U.S. manufactured housing communities business and a portfolio of U.S. industrial and office properties.

– Subsequent to quarter end, we completed our previously announced investments in our Brazilian natural gas pipeline business and Brazilianwater distribution business, transactions valued at $5 billion and $1 billion, respectively.

• Our second flagship real estate opportunity fund, BSREP II, is approximately 80% invested and committed, enabling us to launch the next fund inthis series later this year. In addition, the latest flagship funds in infrastructure (BIF III) and private equity (BCP IV) are now over 45% and 55% investedand committed, respectively. We are currently raising capital for four close-ended and two open-ended private funds, of which $3 billion has beenraised to date.

• Dry powder and core liquidity at the end of the quarter were $20 billion and $9 billion, respectively, providing us with significant capital to deploy ininvestment opportunities as they arise.

• Funds from operations (“FFO”) for the first quarter of 2017 was $674 million and $3.2 billion on an LTM basis. Fee related earnings decreased slightly,which was expected as the prior year quarter included $49 million of catch-up fees and transaction fees. Excluding these items, FFO increased as aresult of an increase in base fees on the higher level of fee bearing capital and growth in incentive distributions, with the annualized base fees nowstanding at $1.2 billion, up 24% from the same time last year.

• Net loss attributable to Brookfield shareholders was $37 million or $0.08 per share, which is after the allocation of income to non-controlling interestand preferred share dividends. Net income decreased over the prior period as the benefits of "same-store" growth across most of our operations andthe positive contribution from new investments were offset by modest fair value reductions in the current year, as compared to gains in the prior year.

– FFO and net income discussed further on the following page.

Contents

Overview 2

Asset Management 4

Invested Capital 13

Additional Information 18

HIGHLIGHTS

2

• Fee related earnings: Fee related earnings were $163 million, representing a 21% increase when excluding the impact of $49 million of catch-up andtransaction fees in 2016, although lower when these fees are taken into consideration. The growth in underlying fee related earnings is due to the higherlevels of fee bearing capital throughout the period. LTM fee related earnings increased by 21% to $691 million. Further details on slide 5.

• FFO from invested capital decreased by 4% as the benefits of acquisitions across multiple business segments were offset by the absence of FFO fromassets sold and a lower ownership of our private equity and service businesses following the spin-off of BBU. Other variances included positive same-storegrowth driven by operational improvements in most of our businesses, including higher pricing and volumes in Norbord, leasing initiatives in our real estategroup and contributions from development projects completed in our infrastructure group, offset by margin adjustments on three projects in our constructionbusiness, which are not expected to recur, and lower North American generation in our renewable power business, which was above long-term average butbelow exceptional generation in high value markets during the prior year quarter. Further details on slide 14.

• Realized disposition gains in the 2017 quarter included the sale of a private equity investment, a U.K. commercial property and wind farms in Ireland.Further details on slide 17.

• Fair value changes in the current quarter decreased due to the impact of lower stock market prices on market-valued investments and modest appraisalreductions within our office portfolio, compared to a higher level of appraisal gains in the 2016 quarter.

Three Months LTMFOR THE PERIODS ENDED MAR. 31(MILLIONS, EXCEPT PER SHARE AMOUNTS) Funds from Operations1 Net Income1 Funds from Operation1 Net Income1

2017 2016 2017 2016 2017 2016 2017 2016

Operating activities

Fee related earnings $ 163 $ 184 $ 163 $ 184 $ 691 $ 569 $ 691 $ 569

Invested capital 294 307 294 307 1,440 1,214 1,440 1,214

457 491 457 491 2,131 1,783 2,131 1,783

Realized carried interest 3 — 3 — 152 30 152 30

Realized disposition gains2 214 212 131 19 925 892 303 324

Fair value changes — — (353) 65 — — (763) 564

Depreciation and amortization — — (201) (206) — — (895) (804)

Deferred income taxes — — (74) (112) — — 429 (28)

$ 674 $ 703 $ (37) $ 257 $ 3,208 $ 2,705 $ 1,357 $ 1,869Per share $ 0.65 $ 0.69 $ (0.08) $ 0.23 $ 3.15 $ 2.64 $ 1.25 $ 1.77

1. Net of non-controlling interests2. FFO includes gains recorded in net income, directly in equity, as well as the realization of appraisal gains recorded in prior periods

OVERVIEWFunds from Operations and Net Income

3

OVERVIEWFinancial Profile

Asset Manager – slide 4Recurring long-term fees receivedfrom managing our funds andcarried interests

Gains on sale of assets, includingcurrent and prior period revaluationgains since acquisition

Invested Capital – slide 13Capital deployed in managedfunds and on a direct basis whichgenerate cash distributions

Conservative long-termcapitalization represents 16% LTV4 on invested capital

1. Earned on total fee bearing capital2. Earned on carry eligible capital3. Capitalization FFO excludes $36 million (LTM – $136 million) of preferred share distributions, which are included in the determination of FFO per share4. Loan to value

AS AT AND FOR THE PERIODS ENDED MAR. 31(MILLIONS, EXCEPT PER SHARE AMOUNTS)

FFOAssociated

CapitalThree

Months LTM

Fee bearing capitalFee related earnings1 $ 113,114 1 $ 163 $ 691Realized carried interest2 40,400 2 3 152

166 843

Invested capitalListed investments $ 26,638 404 1,741Unlisted assets 4,851 (35) 48

31,489 369 1,789Capitalization/interest expense3 (9,222) (62) (247)Working capital/corporate costs (91) (13) (102)

$ 22,176 294 1,440

Realized disposition gains 214 925

FFO $ 674 $ 3,208

Per share $ 0.65 $ 3.15

4

$113 billion Fee Bearing Capital

(Gross inflows of $22 billion LTM)

Financial Performance

21% increase in Fee Related Earnings

over 2016 LTM

$2.1 billion Annualized Fee Base and Carry (31% increase since Q1 2016)

• Fee bearing capital includes our four flagship listedpartnerships (BPY, BEP, BIP and BBU) and otherlisted entities, 38 private funds and numerous funds andaccounts within our public securities operations.

• Four closed-end funds in the market seeking to raise $4 billionof third-party capital, of which $2 billion of fundraising hasalready been completed, and two open-ended funds seekingperpetual commitments, of which $1 billion has been closedto date.

• Diversified client base of 455 global private fund investors.— Average commitment per client ~$110 million.— ~45% of clients invest in multiple funds.

• ~90% of fee bearing capital is perpetual or long term.— Weighted average life to maturity of private fund fee

bearing capital is eight years (plus two one-yearextension periods on average).

• Public securities include mutual funds, separately managedaccounts and hedge funds. As at March 31, 2017, we had$10 billion of capital in long-only strategies and $1 billion inhedge funds.

Fee Bearing Capital – Profile

Fee Revenues and Fee Related Earnings (LTM)1

(MAR. 31, MILLIONS)

ASSET MANAGEMENTSummarized Results

AS AT (MILLIONS) Mar. 2017 Dec. 2016 Mar. 2016Listed partnerships $ 52,102 $ 49,375 $ 45,565Private funds 49,744 49,624 37,256Public securities 11,268 10,577 16,402

$ 113,114 $ 109,576 $ 99,223

1. Adjusted to eliminate BPY commitment to private funds

Three Months LTMFOR THE PERIODS ENDED MAR. 31(MILLIONS) 2017 2016 2017 2016Fee revenues $ 285 $ 288 $ 1,139 $ 961Generated carried interest1 171 137 452 304

$ 456 $ 425 $ 1,591 $ 1,265FFO

Fee related earnings2 $ 163 $ 184 $ 691 $ 569Realized carried interest2,3 3 — 152 30Realized disposition gains — — 5 —

$ 166 $ 184 $ 848 $ 599

1. Generated carried interest based on investment performance. Amounts dependent on future investmentperformance are deferred from FFO

2. Net of direct costs3. Realized carried interest in respect of third-party capital only

1

1. Excludes carried interest ■ Fee Related Earnings ■ Fee Revenues

1,200

1,000

800

600

400

200

02013 2014 2015 2016 2017

$199$324

$404

$569$691

$465

$672$784

$961

$1,139

5

Last Twelve Months:• Private fund base fees grew by 41%, benefitting from $157 million of fees from

new capital, partially offset by decreases from dispositions, which returnedinvested commitments back to clients, reducing our fee base. We received alower fee base on funds which have past their investment period and nowgenerate base fees on invested capital instead of committed capital.

• Incentive distributions increased by 48%, reflecting increased unit distributionsby BIP, BEP and BPY.

• Transaction and advisory fees of $7 million (2016 – $43 million) includes co-investment fees. The prior period also included a one-time $12 million breakfee on Asciano.

• Fee revenues include $237 million of base management fees from Brookfieldcapital (2016 – $180 million).

ASSET MANAGEMENTFee Related Earnings

Current Quarter:• Listed partnership fees increased by $17 million due to higher levels of fee bearing

capital and the inclusion of $6 million of fees from BBU, which was formed at theend of the second quarter of 2016.

• Private fund base fees in the 2017 quarter increased by 22% to $112 million asnew capital raised contributed to $26 million of incremental fees. This increasewas partially offset by $6 million of private fund fees in the prior quarter that arenow earned as listed partnership fees as a result of the spin-off of BBU.

• Gross profit margin (excluding catch-up and transaction fees) was 57% comparedto 56% in the 2016 quarter as higher fee revenues were partially offset by higherdirect costs as a result of the expansion of our operations in anticipation of futurefundraising activities as well building out our capabilities in targetted regions.

• Fee revenues include $59 million of base management fees from Brookfield capital(2016 – $49 million).

FOR THE PERIODS ENDED MAR. 31(MILLIONS)

Three Months1 LTM1

2017 2016 1 Variance 2017 2016 VarianceBase management fees

Listed partnerships $ 115 $ 98 $ 17 $ 435 $ 366 $ 69Private funds 112 92 20 462 328 134

– catch-up fees — 23 (23) 30 35 (5)Public securities 20 24 (4) 88 108 (20)

Incentive distributions (IDRs) 38 25 13 117 79 38285 262 23 1,132 916 216

Transaction and advisory fees2 — 26 (26) 7 43 (36)Performance fees ─ public securities — — — — 2 (2)Fee revenues3 285 288 (3) 1,139 961 178Direct costs2,4

Compensation and benefits (87) (77) (10) (330) (301) (29)Other expenses (35) (27) (8) (118) (91) (27)

Fee related earnings3 $ 163 $ 184 $ (21) $ 691 $ 569 $ 122

1. Prior period adjusted to eliminate BPY fee credit against fees paid by BPY on private fund capital commitments, with no impact on total base fees2. Advisory fees and direct costs for the prior period and LTM figures have been reclassified to reflect advisory fee earnings earned by BBU following the spin-off on June 20, 2016 for the periods prior to

the spin-off where the advisory fee earnings were previously reported in the asset management segment3. Includes $12 million of fee revenues generated by BPY ($54 million on an LTM basis) and $6 million of fee related earnings ($26 million on an LTM basis)4. Direct costs include non-controlling interests of $3 million (2016 – $4 million) and $15 million (2016 – $14 million) for the three months and LTM ended March 31, 2017

6

Unrealized Carried Interest – Realization TimelineAS AT MAR. 31, 2017

Realized Carried Interest1

Carried interest represents our share, as manager, of investment performance in our private funds.We generated carried interest of $171 million in the quarter (LTM – $452 million) based on investmentreturns, increasing cumulative unrealized carried interest to $1.1 billion

Unrealized Carried Interest Continuity1,2

• Estimated based on maturity date of funds currentlygenerating unrealized carried interest

ASSET MANAGEMENTCarried Interest

Three Months LTMFOR THE PERIODS ENDED MAR. 31(MILLIONS) 2017 2016 2017 2016Generated1 $ 171 $ 137 $ 452 $ 304Recognition of unrealized carry 5 — 183 45Less: associated costs (36) (40) (153) (102)Deferred recognition, net1 (137) (97) (330) (217)Realized carried interest, net $ 3 $ — $ 152 $ 30

1. Amounts dependent on future investment performance. Represents management estimate of carried interestgenerated in period if funds were wound up at period end

Three Months LTM


UnrealizedCarried

Interest Direct Costs Net

UnrealizedCarried

Interest Direct Costs NetUnrealized balance, beginning of period $ 898 $ (322) $ 576 $ 795 $ (263) $ 532In period change

Generated 146 (29) 117 422 (113) 309Foreign currency revaluation 25 (5) 20 30 (9) 21

171 (34) 137 452 (122) 330Less: realized (5) 2 (3) (183) 31 (152)Unrealized balance, end of period $ 1,064 $ (354) $ 710 $ 1,064 $ (354) $ 710

1. Amounts dependent on future investment performance are deferred. Represents management estimate of carried interest if funds were wound up at period end 2. Carried interest in respect of third-party capital

■ 0-3 Years 5%

■ 4-7 Years 65%

■ 8+ Years 30%

7

• Our mix of listed partnerships, private funds and public securities portfolios provides diversification and increases stability.

• We estimate annualized base management fees will increase by approximately $65 million when $5 billion of uncalled third-party capital and reserved cash is invested,as base management fees on this capital increase when capital is called in the private funds or cash in the listed partnerships is invested.

• We include base fees on the capital invested by us in our funds in order to present operating margins and investment returns on a consistent basis (see note 1 above).

• We estimate gross margins for fee revenues and target carried interest to range between 55 to 65% and 60 to 70%, respectively, for planning purposes.

Fee Revenue Diversification1Annualized Fees and Target Carry

1. Fee revenues based on annualized March 31, 2017 fees, excludes targetcarried interest

ASSET MANAGEMENTAnnualized Fees and Target Carry

AS AT(MILLIONS) Mar. 31, 2017 Dec. 31, 2016 Mar. 31, 2016Base management fees1,2

Listed partnerships $ 460 $ 435 $ 386 Private funds 485 485 369 Public securities 80 75 95Incentive distributions3 148 148 98

1,173 1,143 948Transaction and advisory4 25 26 10Performance income4 — 2 10Fee revenues5 1,198 1,171 968Target carried interest6 860 860 600

$ 2,058 $ 2,031 $ 1,568

1. Base management fees include $231 million of annualized base fees on Brookfield capital ($228 millionfrom listed partnerships and $3 million from private funds)

2. March 31, 2016 amounts adjusted to eliminate BPY fee credit against fees paid by BPY on its private fundcommitments, with no impact on total base fees (fee credit previously shown separately)

3. Based on most recent quarterly distributions declared4. Annualized March 31, 2017 and December 31, 2016 based on simple average of the last two years'

results. March 31, 2016 has been restated to exclude $70 million of advisory fees which are now earnedby BBU following its spin-off

5. Includes $40 million of annualized fee revenue generated by BPY6. Based on prescribed carried interest for private funds and target gross return. Includes only third-party

capital

■ Listed partnerships 51%

■ Private funds 41%

■ Public securities 7%

■ Transaction and advisory 1%

■ Infrastructure 35%

■ Real estate 34%

■ Renewable power 13%

■ Private equity 11%

■ Public securities 7%

8

Three Months Last Twelve Months


ListedPartnerships1

PrivateFunds1,2

PublicSecurities

Total FeeBearing

ListedPartnerships1

PrivateFunds1,2

PublicSecurities

Total FeeBearing

Balance, beginning of period3 $ 49,375 $ 49,624 $ 10,577 $ 109,576 $ 45,565 $ 37,256 $ 16,402 $ 99,223Inflows 418 296 1,165 1,879 2,625 16,989 2,506 22,120Launch of BBU — — — — 2,300 (1,805) — 495Outflows — — (923) (923) — (1,007) (4,862) (5,869)Distributions (575) (254) — (829) (2,169) (1,605) — (3,774)Market valuation 2,983 57 449 3,489 5,660 57 1,645 7,362Other (99) 21 — (78) (1,879) (141) — (2,020)Change 2,727 120 691 3,538 6,537 12,488 (711) 18,314Sale of securitized credit business — — — — — — (4,423) (4,423)Balance, end of period4 $ 52,102 $ 49,744 $ 11,268 $ 113,114 $ 52,102 $ 49,744 $ 11,268 $ 113,114

1. Includes $2.0 billion and $4.0 billion of listed partnership and private fund capital managed by BPY, respectively, which generates $40 million annualized base fees2. Includes $6.1 billion of co-investment capital (Dec. 31, 2016 – $6.1 billion, Mar. 31, 2016 – $4.9 billion), which earns minimal or no base fees3. LTM private funds capital adjusted for $4.7 billion of Brookfield capital that has been removed from reported fee bearing capital as fees are either not earned or credited against listed partnership fees4. Fee bearing capital includes Brookfield capital of $24 billion in listed partnerships and $0.3 billion in private funds

• Private fund inflows of $17 billion includes BIF III ($10.0 billion), BSREP II($1.6 billion), BCP IV ($0.6 billion), our real estate finance fund ($1.9 billion)and our open-ended core real estate fund ($1.0 billion). Also includes$1.6 billion of co-investments.

• Launch of BBU: The initial capitalization of BBU was $2.3 billion ($25 per unit).Private fund fee bearing capital decreased, reflecting the transfer ofBrookfield's capital commitments to private funds to BBU, as we now earnfees based on BBU's capitalization as opposed to their commitments.

• Outflows: Private funds outflows reflect expiry of commitments over the LTM.• Distributions: Private funds outflows include return of capital to clients relating

to dispositions across several private funds.• Other: Listed partnerships include changes in net non-recourse leverage

included in the determination of capitalization, as a result of deleveraging inBPY and cash held for investments.

• We sold a securitized credit business during the LTM which included$4.4 billion of fee bearing capital.

Three Months:• Inflows: Listed partnership inflows consist of preferred unit issuances from

BEP and BIP. Private fund inflows were primarily due to additional closingsfor our fifth real estate finance fund. Public securities inflows represent capitalcommitted by new clients.

• Outflows: Public securities outflows of $923 million reflect redemptions inperiod.

• Distributions: Private funds distributions of $254 million primarily reflects thereturn of capital to clients relating to a disposition in a private equity fund.

• The total capitalization values of BPY, BIP, BEP and BBU were $20.3 billion,$15.6 billion, $11.9 billion and $2.0 billion, respectively, at March 31, 2017.

Last Twelve Months:• Inflows: Inflows to listed partnerships of $2.6 billion includes $1.9 billion from

BIP, BEP and BBU equity issuances, as well as debt and preferred unitissuances in the various entities.

ASSET MANAGEMENTFee Bearing Capital

Inflows of $22 billion contributed to a 14% increase in fee bearing capital during the lasttwelve months, increasing fee bearing capital to $113 billion

9

Listed Partnerships: Distributions (per unit)• Distribution policies target a distribution level that is sustainable

on a long-term basis while retaining sufficient liquidity for capitalexpenditures and general purposes.

• BBU’s performance fee is calculated as 20% of the increase inunit prices above $25.00, subject to a high water mark.

Per Unit

AS AT MAR 31, 2017(MILLIONS, EXCEPT PER UNIT)

AnnualizedDistributions

DistributionHurdles

IncentiveDistributions1

UnitsOutstanding2

AnnualizedIncentive

DistributionsBrookfield Infrastructure Partners (BIP) $ 1.74 $ 0.81 / $ 0.88 15% / 25% 369.6 $ 110Brookfield Renewable Partners (BEP) 1.87 1.50 / 1.69 15% / 25% 299.2 28Brookfield Property Partners (BPY) 1.18 1.10 / 1.20 15% / 25% 704.8 10

$ 148

1. Incentive distributions equate to 18% and 33% of limited partner distribution increases over the first and second hurdles, respectively2. Based on most recent units outstanding data

BPY BEP BIPTargeted:

- FFO payout 80% 60 to 70% 60 to 70%- Distribution growth 5 to 8% 5 to 9% 5 to 9%

Annual distribution per unit20171 $ 1.18 $ 1.87 $ 1.742016 1.12 1.78 1.542015 1.06 1.66 1.412014 1.00 1.55 1.2820132 1.00 1.45 1.15

1. Annualized based on most recent distribution2. BPY 2013 distribution annualized from spin-off

ASSET MANAGEMENTAnnualized Fees – Incentive Distributions

We receive a portion of increases in the distributions by BIP, BEP and BPY as an incentive toincrease FFO per unit, which should lead to increased unitholder distributions over time

Annualized Incentive Distributions

Incentive Distributions (LTM)(MAR. 31, MILLIONS)

■ BIP ■ BEP ■ BPY

150

125

100

75

50

25

02013 2014 2015 2016 2017 Annualized

$19

$36

$54

$79

$117

$148

10

ASSET MANAGEMENTAnnualized fees – Target Carried Interest

Carry Eligible Capital ($40 billion)(AS AT MAR. 31, 2017)

• Carried interest currently generated by our private fundslags target carried interest, as a significant portion of carryeligible capital is not yet invested.

Carry Eligible Capital(AS AT MAR. 31, BILLIONS)

AS AT MAR 31, 2017(MILLIONS)

Fee BearingCapital

Carry EligibleCapital1

Target Return

Average Carried Interest

UtilizationFactor2

AnnualizedTarget Carried

InterestCore and Value Add $ 31,683 $ 24,134 10% to 15% ~18% 85% $ 380Opportunistic and Private Equity 18,061 16,266 18% to 25% ~20% 75% 480

$ 49,744 $ 40,400 $ 860

1. Excludes capital which is not subject to carried interest2. Utilization factor discount represents the average invested capital over the fund life, taking into account the time to deploy capital at the beginning of the fund and to monetize assets at

the end of the fund

40

35

30

25

20

15

10

5

02013 2014 2015 2016 2017

$5 $8 $6$10

$20

$13$17 $18

$26

$40

Target carried interest reflects our estimate of the carried interest earned on astraight-line basis over the life of a fund, assuming target returns

Target Carried Interest – Annualized

■ Earning carry 49%

■ Uninvested 49%

■ Early stage 2%

■ Uninvested Capital ■ Invested Capital

11

Significant investments include:

– Global renewable power portfolios ($1.4 billion)1

– U.S. manufactured housing communities ($0.5 billion)1

– U.S. industrial and office properties ($0.4 billion)1

– U.K. fuel distributor ($0.3 billion)1

– Canadian gas station portfolio ($0.2 billion)1

– Brazilian natural gas pipeline ($5.2 billion)

– Brazilian water distribution company ($1.2 billion)

– South Korean mixed-used property ($0.9 billion)

– Privatization of U.S. regional mall business ($0.7 billion)

– Indian telecommunications tower business ($0.6 billion)

1. Invested or committed during the most recent quarter

ASSET MANAGEMENTCapital Deployed

Invested or committed $17 billion of capital during the LTM on a global basis, including$3 billion in the most recent quarter

Capital DeployedFOR THE LTM ENDED MAR. 31, 2017

FOR THE LTM ENDED MAR. 31(MILLIONS) Real Estate Infrastructure

RenewablePower

Private Equityand Other Total

North America $ 2,704 $ 936 $ 929 $ 866 $ 5,435

South America — 517 977 262 1,756

Europe 246 7 109 — 362

Asia and other 818 — — 13 831

Total invested $ 3,768 $ 1,460 $ 2,015 $ 1,141 $ 8,384

■ Private funds 44%

■ Listed partnerships 31%

■ Co-investments 20%

■ Direct 5%

Capital Invested (Geography)

Capital Deployed (Funding Source)

FOR THE LTM ENDED MAR. 31(MILLIONS) Real Estate Infrastructure

RenewablePower

Private Equityand Other Total

Listed partnerships1 $ 923 $ 731 $ 728 $ 67 $ 2,449

Private funds2 2,516 452 881 194 4,043

Co-investments2 329 277 406 44 1,056

Direct3 — — — 836 836

Total invested 3,768 1,460 2,015 1,141 8,384

Committed - new4 1,715 7,348 1,590 1,576 12,229

Committed - invested4 (1,302) (747) (1,369) 208 (3,210)

Total $ 4,181 $ 8,061 $ 2,236 $ 2,925 $ 17,403

1. Includes investments made by listed partnerships (BPY, BIP, BEP and BBU) directly or through its participation in private fundsand co-investments

2. Reflect third-party investments managed by Brookfield3. Investments made by Brookfield in financial assets or on balance sheet assets other than the listed partnerships4. New commitments represent those commitments entered into during the LTM. Invested commitments represent the amounts

invested during the year for commitments which were entered into during the prior periods (shown as an outflow to commitmentsand an inflow to invested). Where capital was both committed and invested in the same LTM period, it will be presented as investedonly

12

• Corporate credit facilities totalled $1.9 billion, of which $61 million was drawn and utilized for letters of credit at March 31, 2017.

• Total liquidity of $28.6 billion at March 31, 2017 includes core liquidity of $8.6 billion and third-party uncalled commitments of $20.0 billion.

Uncalled Fund Commitments – Expiry Profile

• Uncalled commitments expire after approximately four years, based on the weighted average time to the end of each fund's investment period.

• We invested $0.9 billion of third-party fund capital during the first quarter; $4.8 billion during the last twelve months.

• $5.0 billion of fund capital committed to transactions yet to be closed (real estate – $1.0 billion, infrastructure and renewable power – $3.2 billion, and private equity– $0.8 billion).

Core and Total Liquidity

AS AT MAR. 31, 2017 AND DEC. 31, 2016(MILLIONS) Corporate Real Estate

RenewablePower Infrastructure

Private Equityand Other Total 2017 Dec. 2016

Cash and financial assets, net $ 1,732 $ 56 $ 292 $ 200 $ 637 $ 2,917 $ 2,592

Undrawn committed credit facilities 1,869 1,329 899 1,476 150 5,723 6,375

Core liquidity 3,601 1,385 1,191 1,676 787 8,640 8,967

Uncalled private fund commitments1 — 7,931 2,565 7,203 2,281 19,980 19,904

Total liquidity $ 3,601 $ 9,316 $ 3,756 $ 8,879 $ 3,068 $ 28,620 $ 28,871

1. Third-party private fund uncalled commitments

AS AT MAR. 31, 2017 AND DEC. 31, 2016(MILLIONS) 2017 2018 2019 2020 2021+ Mar. 2017 Dec. 2016Real estate $ 123 $ 97 $ 37 $ 5,104 $ 2,570 $ 7,931 $ 7,943Infrastructure and renewable power 601 — — 8,335 832 9,768 9,810Private equity 116 — 1,991 — 174 2,281 2,151

$ 840 $ 97 $ 2,028 $ 13,439 $ 3,576 $ 19,980 $ 19,904

ASSET MANAGEMENTAvailable Liquidity

13

Financial Performance

~85%of invested capital is held in

listed securities

over $31 billioninvested capital

alongside our clients

$1.3 billion of annualized cash flow

generated from listed investments

(MAR. 31, MILLIONS)

1. Excludes disposition gains and is net of associated asset management fees paid

FFO – Operating Activities (LTM)1

1. Prior periods restated to include BBU's FFO in listed investments2. FFO excludes distributions on preferred shares

Funds from OperationsAS AT MAR. 31, 2017 AND DEC.31, 2016 AND FOR THEPERIODS ENDED MAR. 31(MILLIONS)

Invested Capital Three Months LTM

2017 2016 2017 2016 2017 2016

Listed investments1 $ 26,638 $ 26,306 $ 404 $ 445 $ 1,741 $ 1,495

Unlisted assets 4,851 4,692 (35) (49) 48 61

Capitalization2 (9,313) (8,827) (75) (89) (349) (342)

22,176 22,171 294 307 1,440 1,214

Disposition gains — — 214 212 925 892

$ 22,176 $ 22,171 $ 508 $ 519 $ 2,365 $ 2,106

Investment Portfolio(AS AT MAR. 31, 2016)

INVESTED CAPITALSummarized Results

Growth Capital Backlog(AS AT MAR. 31, 2016, BILLIONS)

• We continued to expand our pipeline of development andcapital expansion projects which stands at nearly $14 billion,providing meaningful growth opportunities that complementour acquisitions activity.

■ Real Estate $ 7.1

■ Infrastructure $ 3.8

■ Renewable Power $ 2.3

■ Private Equity and Other $ 0.8

■ BPY

■ BEP

■ BIP

■ BBU

■ Other Listed

■ Unlisted

1,500

1,250

1,000

750

5002013 2014 2015 2016 2017

$1,008

$1,212 $1,193 $1,214

$1,440

• ~85% of our balance sheet is held through listed securities,the majority invested in our four listed partnerships, providingliquidity and increased transparency.

14

First Quarter:• BPY: The contributions from capital deployed and leasing initiatives in

addition to a $14 million (at our share) tenant settlement gain at CanaryWharf were partially offset by the absence of FFO from assets sold.

• BEP: Generation in our North American hydroelectric business, while abovelong-term average in the current quarter, was lower than the exceptionalgeneration in the prior year quarter.

• BIP: Reflects contributions from acquisitions, higher tariffs and volumesacross our operations and stronger connection activity in our U.K. utility,which were partially offset by increased management fees.

• BBU: FFO decreased due to margin adjustments on three Australianconstruction projects as well as management fees paid and lower ownershipfollowing the spin-off of BBU.

• Residential: Higher housing margins in our North American operations,including western Canada where stabilizing oil prices resulted in improvedconsumer confidence, partially offset by lower deliveries in our Brazilianoperations.

• Other Investments: Strong OSB pricing and volumes in Norbord waspartially offset by the absence of interest income on a debt investmentwhich was converted into equity.

• Corporate costs and taxes: Reflects current tax recovery in the quartercompared to current tax expense in the 2016 quarter.


Three Months LTM2017 2016 Variance 2017 2016 Variance

Brookfield Property Partners $ 174 $ 159 $ 15 $ 726 $ 638 $ 88Brookfield Renewable Partners 97 114 (17) 232 291 (59)Brookfield Infrastructure Partners 70 63 7 261 231 30Brookfield Business Partners 9 37 (28) 149 229 (80)Residential development (8) (15) 7 70 118 (48)Energy marketing (40) (46) 6 (63) (96) 33Other investments 53 50 3 283 132 151Financial assets 14 34 (20) 131 13 118

369 396 (27) 1,789 1,556 233Unallocated

Interest expenses (62) (56) (6) (247) (223) (24)Corporate costs and taxes (13) (33) 20 (102) (119) 17

FFO – Invested capital $ 294 $ 307 $ (13) $ 1,440 $ 1,214 $ 226

Last Twelve Months:• BPY: Reflects contributions from capital deployed in our opportunistic segment

as well as positive same-property growth in our office and retail portfolios.

• BEP: Lower pricing and generation across our operations were partially offsetby contribution from acquired assets in Colombia, Brazil and Pennsylvania.

• BBU: FFO decreased due to our lower ownership of BBU following its spin-offas well as the impact of foreign exchange and margin adjustments in ourconstruction operations.

• Residential: Higher housing margins and volumes in our U.S. and easternCanadian operations were more than offset by lower margins in our Brazilianoperations as well as product mix and lower pricing in western Canada.

• Energy Marketing: FFO increased due to asset mix which improved marginson power purchases and sales.

• Other Investments: Strong OSB pricing and volumes at Norbord, whichcontributed $106 million of the increase, as well as merchant development gainsfrom our directly held real estate business.

INVESTED CAPITAL – SEGMENT FUNDS FROM OPERATIONS(Excluding Realized Disposition Gains)

15

~85% of our invested capital is held in listed securities, which provides enhancedtransparency for investors and financial flexibility and liquidity for Brookfield

AS AT AND FOR THE PERIODS ENDED MAR. 31, 2017(MILLIONS)

Invested Capital FFO3 Distributed Cash Flow

(Annualized)4No. of Units Quoted2 IFRS Three Months LTMListed Investments

Brookfield Property Partners 488 $ 10,863 $ 15,227 $ 155 $ 650 $ 576BPY Preferred Shares n/a 1,265 1,265 19 76 76

12,128 16,492 174 726 652Brookfield Renewable Partners 183 5,452 3,773 97 232 343Brookfield Infrastructure Partners 110 4,265 1,881 70 261 192Brookfield Business Partners 81 1,993 1,926 9 149 20Financial assets5 Various 1,732 1,732 14 131 104Other Investments

ListedNorbord 35 995 295 37 151 10Acadian Timber 8 104 80 3 8 6Other Listed - Private Equity Various 459 459 — 83 —

$ 27,128 26,638 404 1,741 $ 1,327Unlisted Investments

Residential development 2,717 (8) 70Energy marketing 1,039 (40) (63)Other 1,095 13 41

4,851 (35) 48$ 31,489 $ 369 $ 1,789

1. See slide 29 and 30 for a reconciliation to total FFO and invested capital2. Quoted value based on March 31, 2017 public pricing3. Excludes realized disposition gains4. Annualized distributed cash flow is based on current distribution policies5. Includes $1,107 million of cash and cash equivalents and $625 million of financial assets, net of deposits6. Estimated 8% annualized total return on weighted average balance over the last twelve months

INVESTED CAPITALEntity Basis1

6

16

Corporate debt maturities are well distributed with an average term to maturity ofeight years and with ~80% of our term debt maturing after five years

1. FFO excludes preferred shares distributions of $36 million (2016 – $33 million) for the three months; and $136 million (2016 – $133 million) for the last twelve months2. Corporate costs and taxes FFO includes current tax recovery of $12 million (2016 – expense of $10 million) for the three months; current tax expense of $8 million ($19 million) for the last twelve

months

1. Revolving credit facilities of $1.9 billion to support commercial paper issuances (20 bps spread) or bankers acceptances/LIBOR loans (100 bps spread)

Corporate Maturity ProfileMaturity


AverageTerm

(Years) Total 2017 2018 2019 2020 2021 2022+Corporate borrowings

Term debt 8 $ 5,272 $ 427 $ — $ 451 $ — $ 263 $ 4,131Revolving facilities1 4 — — — — — — —

5,272 427 — 451 — 263 4,131Preferred shares perp. 3,950 — — — — — n/a

$ 9,222 $ 427 $ — $ 451 $ — $ 263 $ 4,131

Funds from OperationsAS AT MAR. 31, 2017 AND DEC. 31, 2016 AND FOR THE PERIODSENDED MAR. 31(MILLIONS)

Average Invested Capital Three Months LTMYield 2017 2016 2017 2016 2017 2016

Corporate borrowings 4.7% $ 5,272 $ 4,500 $ 62 $ 56 $ 247 $ 223Preferred shares1 4.2% 3,950 3,954 — — — —Net working capital / Corporate costs and taxes2 n/a 957 1,021 13 33 102 119Deferred income tax asset, net n/a (866) (648) — — — —

$ 9,313 $ 8,827 $ 75 $ 89 $ 349 $ 342

INVESTED CAPITALCorporate Capitalization

17

Three Months LTM

FOR THE PERIODS ENDED MAR. 31(MILLIONS, EXCEPT PER SHARE AMOUNTS)

Funds from Operations1,2 Net Income2 Funds from Operations1,2 Net Income2

2017 2016 2017 2016 2017 2016 2017 2016

BPYPrincipal Place Commercial $ 141 $ — $ 69 $ — $ 141 $ — $ 69 $ —One New York Plaza — — — — 128 — (31) —Fashion Show Mall — — — — 125 — 4 —One Shelley Street — — — — 90 — — —Interhotels — — — — 73 — 73 —Hardrock trademarks — — — — 59 — 59 —Manhattan West partial sale — — — — — 203 — 191Other properties 1 212 — 19 137 632 42 126

142 212 69 19 753 835 216 317

BIP — — — — 95 7 20 4BBU - MAAX Bath and Spa 62 — 62 — 62 — 62 —Other 10 — — — 15 50 5 3

$ 214 $ 212 $ 131 $ 19 $ 925 $ 892 $ 303 $ 324

Per share $ 0.22 $ 0.22 $ 0.13 $ 0.02 $ 0.95 $ 0.92 $ 0.31 $ 0.33

1. FFO includes gains recorded in net income, directly in equity, as well as the realization of appraisal gains recorded in the prior years2. Net of non-controlling interests

First Quarter:

• BPY: Partial disposition of Principal Place Commercial in London for a gain of $141 million.

• BBU: Disposition of a bath and shower products manufacturing business for a gain of $62 million.

• Other: Disposition of wind farms in Ireland.

Last Twelve Months:

• 2017: Office and other property disposition gains ($329 million); retail property disposition gains ($424 million); sale of a bath and shower manufacturing business($62 million); sale of a European gas distribution business ($42 million); sale of a toehold interest in an Australian ports business ($20 million).

• 2016: Office and other property disposition gains ($235 million); retail property disposition gains ($181 million) including the sale of a partial interest in our marqueeretail mall in Honolulu ($113 million).

INVESTED CAPITALRealized Disposition Gains – Brookfield Share, Net of Non-Controlling Interests

18

Additional Information

19

• Core office: FFO increased by $7 million to $156 million due to 4.2% same-store growth as a result of new leases in Lower Manhattan, as well as a $20 million legalsettlement gain in London. These positive variances were partially offset by the absence of FFO from assets sold and the impact of foreign exchange.

— Average in-place core office rent is $33.86 psf, representing a discount of 17% to market rent, and has an average term of eight years.— We completed 1.4 msf of leases during the quarter at average net rents of $38.04 psf, 25% higher than expiring rents, while occupancy in our core portfolio

ended at 91.5%, which was largely consistent with the prior year.

• Core retail: FFO of $110 million remained relatively consistent with prior the year quarter as a 1.4% same-store revenue growth was offset by the absence of FFOfrom assets sold. Same-store growth rate decreased relative to the prior year as a result of a small number of tenant bankruptcies. However, the majority of this spacehas since been re-leased.

— Average in-place retail rent of $62.92 psf with a six-year average term to maturity, up from $62.42 psf at March 31, 2016; with over 2,300 signed leasescommencing in the last twelve months comprising approximately 9.0 msf.

— Initial and average rent spreads for executed leases commencing in the LTM ended March 31, 2017 on a suite-to-suite basis were 10.5% and 19.7%respectively, compared to the rental rate for expiring leases.

• Opportunistic: FFO increased by $10 million to $83 million, mainly from the contribution of capital deployed over the past twelve months.

• Corporate: Corporate costs decreased to $112 million in the current quarter primarily as a result of lower management fees.

Financial Position and Performance – BPY

1. Reflects fee related earnings reclassified to asset management segment as well as net carried interest paid

AS AT MAR. 31, 2017 AND DEC. 31, 2016 ANDFOR THE PERIODS ENDED MAR. 31(MILLIONS)

Funds from Operations


2017 2016 2017 2016 2017 2016

Core office $ 14,369 $ 14,626 $ 156 $ 149 $ 637 $ 618

Core retail 8,649 8,707 110 111 458 460

Opportunistic 4,888 4,653 83 73 351 264

Corporate (5,914) (5,628) (112) (116) (459) (467)

Attributable to unitholders 21,992 22,358 237 217 987 875

Non-controlling interest (6,765) (6,987) (74) (69) (309) (282)

Segment reallocation and other1 — — (8) (8) (28) (31)

Brookfield's interest 15,227 15,371 155 140 650 562

Preferred shares 1,265 1,265 19 19 76 76$ 16,492 $ 16,636 $ 174 $ 159 $ 726 $ 638

Brookfield Property Partners (NYSE: BPY; TSX: BPY.UN)Ownership Interest – 63% (fully diluted)

20

• Hydroelectric: Generation was 5,509 GWh, up from 5,240 GWh in the prior year period, and the LTA of 5,309 GWh. The increase in generation over the prior yearperiod is driven by our Colombian operations, which experienced a return to normal levels whereas the generation in the prior year was impacted by drier conditions.In North America, current year generation was above LTA; however, it was below the prior year which had exceptional inflows. The decrease in FFO compared to theprior period is a result of the lower North American generation, partially offset by higher realized pricing in our Brazilian operations.

• Wind: Generation was 628 GWh, consistent with the prior year, but slightly below LTA of 654 GWh. Canada and Brazil both realized increased generation partiallyoffset by a decrease in generation in the U.S. FFO increased slightly as pricing in Brazil improved from low levels in the prior year quarter.

AS AT MAR. 31, 2017 AND DEC. 31, 2016 AND FORTHE PERIODS ENDED MAR. 31(MILLIONS)



2017 2016 2017 2016 2017 2016

Proportionate generation (GWh)

Actual n/a n/a 6,161 5,896 20,527 18,998

Long-term average (LTA) n/a n/a 5,992 5,469 23,433 19,811

Hydroelectric generation $ 8,362 $ 8,208 $ 191 $ 212 $ 490 $ 571

Wind energy 622 696 30 28 100 113

Facilities under development 218 240 — — — —

Corporate and other (3,048) (2,961) (55) (53) (192) (183)


Incentive distributions — — (7) (5) (22) (12)


Reclass - disposition gains1 — — — — — (18)

Brookfield's interest $ 3,773 $ 3,793 $ 97 $ 114 $ 232 $ 291

1. The prior year quarter includes a reallocation of $18 million to disposition gains (net of NCI) related to the sale of a 102 MW wind facility in California and compensation for extinguishedconcession agreements relating to two Brazilian hydroelectric facilities

Financial Position and Performance – BEP

Brookfield Renewable Partners (NYSE: BEP, TSX: BEP.UN)Ownership Interest – 61%

21

• Utilities: FFO remained consistent with the prior year quarter as strong connections activity, as well as inflation indexation and capital commissioned into rate base,and were offset by a lower regulated return in Australia following the rate reset at our regulated terminal, the sale of our North American electricity transmissionbusiness and foreign exchange.

— We have over $1 billion of total capital to be commissioned into our rate base over the next two to three years.

• Transport: FFO increased by $29 million compared to the prior year quarter due to higher tariffs and volumes across a number of operations, the expansion of ourtoll road operations and the contribution from our Australian ports business acquired in the third quarter of 2016, partially offset by the impact of foreign exchange.

— Capital to be commissioned of $1 billion at March 31, 2017 consists of expansion and upgrades to our Brazilian rail business and projects to add additionalcapacity to our toll roads and ports.

• Energy: FFO increased $22 million due to higher transportation volumes, newly secured contracts, lower interest expense as a result of de-leveraging initiatives allat our North American natural gas transmission business, as well as from the acquisition of additional North American gas storage operations. The strong activity waspartially offset by the impact of the sale of our U.K. energy distribution business in the second quarter of 2016.

• Corporate and other: FFO decreased by $24 million to a net expense of $43 million primarily due to a special dividend received in 2016, higher base managementfees from increased market capitalization, and interest expense associated with increased borrowings used to fund new investments.

Financial Position and Performance – BIP




2017 2016 2017 2016 2017 2016

Utilities $ 1,827 $ 1,807 $ 100 $ 100 $ 399 $ 392

Transport 3,661 3,549 123 94 452 396

Energy 1,592 1,564 62 40 197 102

Communications 544 541 19 19 77 79

Corporate and other (1,304) (963) (43) (19) (154) (113)


Incentive distributions — — (28) (19) (89) (68)


Brookfield's interest $ 1,881 $ 1,934 $ 70 $ 63 $ 261 $ 231

Brookfield Infrastructure Partners (NYSE: BIP, TSX: BIP.UN)Ownership Interest – 30%

22

• Construction services: FFO decreased by $25 million primarily due to margin adjustments on three projects in our Australian business, which disproportionatelyimpacted results in the current period. Excluding these projects, our portfolio of 105 projects continues to positively contribute to FFO, benefitting from both regionaland product diversity. Our backlog stands at $7.3 billion, representing nearly two years of activity.

• Business services: The increase in FFO of $2 million is attributable to higher volume of project work in our facilities management operation as well as incrementalFFO from our recent acquisitions of facilities management operations in Canada and in the U.S. These increases were partially offset by lower levels of activity in ourfinancial advisory services business.

• Energy: FFO increased by $2 million primarily due to $10 million of gains on the disposition of investment securities. This increase was partially offset by lowercontributions from our Western Australian oil and gas operations as a result of our lower ownership in the operation.

• Industrial operations: The FFO increase of $84 million is primarily attributable to an $82 million gain, at BBU’s share, recognized on the disposition of our bath andshower products manufacturing business. The remainder of the increase is attributable to higher sales volume in our graphite electrode business and improved pricingin our palladium mining operations.

• Corporate and other: Corporate and other expenses of $5 million were primarily comprised of management fees and other corporate expenses, including audit anddirector fees, partially offset by interest income. These costs are incurred following the spin-off of BBU.

Financial Position and Performance – BBU




2017 2016 2017 2016 2017 2016

Construction services $ 943 $ 877 $ (3) $ 22 $ 69 $ 93

Business services 352 357 4 2 56 44

Energy 364 344 20 18 65 77

Industrial operations 300 372 79 (5) 90 6

Corporate and other 612 551 (5) — (22) —


Non-controlling interest (645) (636) (24) — (47) —

Segment reallocation and other1 — — (62) — (62) 9$ 1,926 $ 1,865 $ 9 $ 37 $ 149 $ 229

1. Current period includes reallocation of $62 million to disposition gains (net of NCI) related to the sale of a bath and shower products manufacturing business. Prior period and LTM figureshave been restated to reflect advisory fee earnings reported by BBU following the spin-off on June 20, 2016 for the periods prior to the spin-off where the advisory fee earnings werepreviously reported in the asset management segment

Brookfield Business Partners (NYSE: BBU, TSX: BBU.UN)Ownership Interest – 75%

23

Our residential development operations are focused on land development and housingconstruction in North America and condominium projects in Brazil

Financial Position and Performance

• North America: FFO increased by $13 million due primarily to higher housing gross margins reflecting stronger market conditions, particularly the stabilization ofoil prices favourably impacting our western Canadian operations.

— Housing gross margins increased by $14 million as a result of 65 additional units closed as well as a shift in the product mix of homes closed. In the U.S.,average home selling prices increased 17% primarily driven by our operations in the Bay Area and southern California where a higher number of luxuryhomes were sold. In Canada, the average selling price increased by 9% driven by the strong market conditions in Ontario.

— Land gross margins increased by $7 million driven by increased activity in our western Canadian markets. There were 55 additional lot closings in Canada,primarily attributable to a new community in Alberta.

— New home orders were up 16% in the quarter as compared to the same quarter of the prior year due to strong results across all regions.

• Brazil and other: FFO decreased by $6 million due to a lower number of project deliveries and inventory sales partially offset by reductions in corporate expenses,which have been reduced significantly as a result of the resizing of the business.




2017 2016 2017 2016 2017 2016

North America $ 1,473 $ 1,441 $ 11 $ (2) $ 173 $ 157

Brazil and other 1,244 1,238 (19) (13) (103) (39)

$ 2,717 $ 2,679 $ (8) $ (15) $ 70 $ 118

INVESTED CAPITALResidential Development

24

• We have agreements to purchase approximately 8,400 GWh from BEP annually based on long-term average generation. Approximately 34% of the acquired poweris sold under long-term contracts with high credit-quality counterparties. We attempt to maximize the value we receive on this electricity through optimization ofstorage and sale of merchant electricity at peak times, or by executing long-term contracts for this power at rates which we believe are favourable based on ourexpectation of pricing of electricity generated by new build construction.

• We expect the negative spread on uncontracted power to turn positive over the longer term as prices for renewable power increase. Existing long-term contractsprovide both a current positive FFO contribution as well as future increases through escalation clauses and the opportunity to renew contracts in the future.

Three Months

Last Twelve Months

• FFO deficit improved by $6 million and reflects higher average realized pricing for contracted power at $79/MWh, $9/MWh higher than the prior year. — Ancillary revenues including capacity payments, green credits and revenues generated for the peaking ability of our plants totalled $10 million, increasing average realized prices by $4/MWh.

FOR THE THREE MONTHS ENDED MAR. 31(GWh AND MILLIONS)

Generation (GWh) FFO Per MWh

2017 2016 2017 2016 2017 2016

Contracted 866 990 $ 68 $ 69 $ 79 $ 70

Uncontracted and financial contracts 1,665 1,760 63 65 38 37

2,531 2,750 131 134 52 49

Less: Purchases from BEP (2,531) (2,750) (171) (180) (68) (66)

FFO — — $ (40) $ (46) $ (16) $ (17)

FOR THE LTM ENDED MAR. 31(GWh AND MILLIONS)

Generation (GWh) FFO Per MWh

2017 2016 2017 2016 2017 2016

Contracted 2,627 2,805 $ 207 $ 213 $ 79 $ 76

Uncontracted and financial contracts 5,016 5,284 236 238 47 45

7,643 8,089 443 451 58 56

Less: Purchases from BEP (7,643) (8,089) (506) (547) (66) (68)

FFO — — $ (63) $ (96) $ (8) $ (12)

INVESTED CAPITALBrookfield Energy Marketing

25

• Norbord: FFO increased by $18 million over the prior year quarter as a result of a 36% increase in average North American OSB pricing from $208 per thousandsquare feet ("Msf") in the first quarter of 2016 to $282 per Msf this quarter, and a 7% increase in North American volumes from 1.3 billion square feet to 1.4 billionsquare feet.

• Sustainable resources: These investments include timberlands in the northeastern U.S. and Canada, as well as capital in Brazil in a number of timber and agricultureprivate funds managed by us. FFO results improved due to favourable weather conditions for soybean harvests as well as higher cattle sales in our agriculturalbusiness.

• Other real estate: FFO increased by $7 million due to lower interest expense following a debt repayment. Other real estate consists primarily of directly held realestate assets, associated borrowings and preferred share obligations.

• Other private equity: FFO decreased by $27 million this quarter primarily as a result of the absence of interest income earned in prior year on corporate bonds thatwere converted to equity in late 2016.

We own certain assets directly, which are managed within our various segments

Financial Position and Performance

AS AT MAR. 31, 2017 AND DEC. 31, 2016AND FOR THE PERIODS ENDED MAR. 31(MILLIONS)


Invested Capital Three Months LTMSegment 2017 2016 2017 2016 2017 2016

Norbord Private Equity $ 295 $ 276 $ 37 $ 19 $ 151 $ 45

Acadian Timber Infrastructure 80 79 3 2 8 8

Sustainable resources Infrastructure 707 684 10 6 22 20

Other real estate Real Estate 177 91 9 2 34 4

Other private equity Private Equity 670 721 (6) 21 68 55$ 1,929 $ 1,851 $ 53 $ 50 $ 283 $ 132

INVESTED CAPITALOther Investments

26

• Capitalization includes accounts payable and other liabilities and deferred income taxes, as well as borrowings, subsidiary equity obligations and equity, which isconsistent with how we assess our leverage ratios and how we present them to our rating agencies.

— Corporate capitalization shows debt on a deconsolidated basis. — Proportionate consolidation, which reflects our proportionate interest in the underlying entities, depicts the extent to which our underlying equity is leveraged,

which we believe is an important component of enhancing shareholder returns. — Consolidated capitalization reflects the full consolidation of wholly owned and partially owned entities; however, excludes amounts within equity accounted

investments.

CapitalizationCorporate Proportionate1 Consolidated1

AS AT MAR. 31, 2017 AND DEC. 31, 2016(MILLIONS) 2017 2016 2017 2016 2017 2016Corporate borrowings $ 5,272 $ 4,500 $ 5,272 $ 4,500 $ 5,272 $ 4,500Non-recourse borrowings Property specific borrowings — — 27,408 26,421 56,665 52,502 Subsidiary borrowings — — 5,173 5,231 7,990 7,949

5,272 4,500 37,853 36,152 69,927 64,951

Accounts payable and other 1,630 1,901 7,728 7,726 12,047 11,982Deferred income tax liabilities 245 246 4,210 4,572 9,830 9,640Subsidiary equity obligations — — 1,716 1,828 3,766 3,565Equity Non-controlling interests — — — — 43,965 43,235 Preferred equity 3,950 3,954 3,950 3,954 3,950 3,954 Common equity 22,511 22,499 22,511 22,499 22,511 22,499

26,461 26,453 26,461 26,453 70,426 69,688Total capitalization $ 33,608 $ 33,100 $ 77,968 $ 76,731 $ 165,996 $ 159,826Debt to capitalization2 16% 14% 49% 47% 42% 41%

1. Reflects liabilities associated with assets held for sale on a consolidated and proportionate basis according to the nature of the balance2. Determined as the aggregate of corporate borrowings and non-recourse borrowings divided by total capitalization

DEBT TO CAPITALIZATION

27

Financial Highlights

• Revenues increased by 15% due to earnings generated from recently acquired businesses and improved volumes and pricing at existing businesses. These positivevariances were partially offset by the inclusion of revenue in the prior year from assets which have been disposed of over the last twelve months. The impact of theseacquisitions and dispositions had similar impact on direct costs.

• Other income and gains in the current quarter includes a $228 million gain on the disposition of a private equity investment.

• Equity accounted income increased in the current quarter due to contributions from acquired equity accounted investments over the last twelve months. The prioryear included fair value losses incurred by Canary Wharf on interest rate swap contracts and investment properties, whereas the current quarter fair value changeswere relatively flat.

• Fair value changes in the current quarter decreased due to mark-to-market on assets that are revalued based on stock market prices and modest appraisal reductionswithin our office portfolio, compared to appraisal gains in the 2016 quarter.

• Net income attributable to shareholders decreased based on the aforementioned factors as well as a higher proportion of income being attributed to non-controllinginterest based on the mix of income earned across the portfolio relative to our ownership in the various businesses.

Condensed Statements of Operations

FOR THE THREE MONTHS ENDED MAR. 31(MILLIONS, EXCEPT PER SHARE AMOUNTS) 2017 2016 ChangeRevenue $ 6,001 $ 5,218 $ 783Direct costs (4,387) (3,648) (739)Gross margin 1,614 1,570 44Other income and gains 265 35 230Equity accounted income 335 152 183Expenses

Interest (843) (767) (76)Corporate costs (25) (23) (2)

Fair value changes (204) 352 (556)Depreciation and amortization (499) (481) (18)Income tax (125) (202) 77Net income 518 636 (118)Non-controlling interests (555) (379) (176)Net Income (loss) attributable to shareholders $ (37) $ 257 $ (294)

Per share $ (0.08) $ 0.23 $ (0.31)

FINANCIAL PERFORMANCE (IFRS)Three Months Ended March 31

28

Common Share Continuity

FFO and Earnings Per Share Information

• The company holds 29.2 million common shares for management share ownership plans, which have been deducted from the total number of shares outstanding.— 5.7 million shares would be issued in respect of these plans if exercised based on current market prices and the balance would be cancelled.

• Cash value of unexercised options at March 31, 2017 was $1,067 million (December 31, 2016 – $901 million).


Three Months LTM2017 2016 2017 2016

Outstanding at beginning of period 958.2 961.3 958.6 927.1Issued (repurchased)

Issuances — — — 32.9Repurchases (1.9) (3.3) (3.4) (10.6)Long-term share ownership plans 2.2 0.5 3.0 8.9Dividend reinvestment plan 0.1 0.1 0.4 0.3

Outstanding at end of period 958.6 958.6 958.6 958.6Unexercised options and other share-based plans 47.7 46.9 47.7 46.9Total diluted shares at end of period 1,006.3 1,005.5 1,006.3 1,005.5

FOR THE THREE MONTHS ENDED MAR. 31(MILLIONS)

Funds from Operations Net Income2017 2016 2017 2016

Funds from operations/Net income $ 674 $ 703 $ (37) $ 257Preferred share dividends (36) (33) (36) (33)Funds from operations/Net income

available for shareholders $ 638 $ 670 $ (73) $ 224

Weighted average shares 958.5 959.2 958.5 959.2Dilutive effect of the conversion of options

and other share-based plans using 19.1 15.6 — 15.6treasury stock method

Shares and share equivalents 977.6 974.8 958.5 974.8

SUPPLEMENTAL INFORMATION

29

Reportable Segments


AssetManagement Real Estate


PrivateEquity Residential Corporate Total

Asset ManagementFee related earnings $ 335 $ — $ — $ — $ — $ — $ — $ 335Carried interest, net — — — — — — — —

335 — — — — — — 335Invested capital

Brookfield Property Partners1 — 16,492 — — — — — 16,492Brookfield Renewable Partners — — 3,773 — — — — 3,773Brookfield Infrastructure Partners — — — 1,881 — — — 1,881Brookfield Business Partners — — — — 1,926 — — 1,926Residential Development — — — — — 2,717 2,717Brookfield Energy Marketing — — 1,039 — — — 1,039Other investments2 — 177 — 787 965 — — 1,929Cash and financial assets — — — — — — 1,732 1,732

— 16,669 4,812 2,668 2,891 2,717 1,732 31,489Capitalization (slide 16)

Borrowings — — — — — — (5,272) (5,272)Net working capital/operating costs — — — — — — (91) (91)Preferred shares — — — — — — (3,950) (3,950)

— — — — — — (9,313) (9,313)$ 335 $ 16,669 $ 4,812 $ 2,668 $ 2,891 $ 2,717 $ (7,581) $ 22,511

FINANCIAL PROFILEEntity Basis – Reconciliation to Reportable Segments – Invested Capital

1. Includes $1.3 billion of BPY preferred shares 2. Includes $834 million of listed and $1.1 billion of unlisted investments across private equity, real estate and sustainable resources

30

Reportable Segments

FOR THE THREE MONTHS ENDED MAR. 31, 2017(MILLIONS)

AssetManagement Real Estate


PrivateEquity Residential Corporate Total

Asset ManagementFee related earnings $ 163 $ — $ — $ — $ — $ — $ — $ 163Carried interest, net 3 — — — — — — 3

166 — — — — — — 166Invested capital

Brookfield Property Partners1 — 174 — — — — — 174Brookfield Renewable Partners — — 97 — — — — 97Brookfield Infrastructure Partners — — — 70 — — — 70Brookfield Business Partners — — — — 9 — — 9Residential Development — — — — — (8) — (8)Brookfield Energy Marketing — — (40) — — — — (40)Other investments — 9 — 13 31 — — 53Cash and financial assets — — — — — — 14 14

— 183 57 83 40 (8) 14 369Disposition gains — 142 10 — 62 — — 214

— 325 67 83 102 (8) 14 583Capitalization (slide 16)2

Borrowings — — — — — — (62) (62)Net working capital/operating costs — — — — — — (13) (13)

— — — — — — (75) (75)$ 166 $ 325 $ 67 $ 83 $ 102 $ (8) $ (61) $ 674

FINANCIAL PROFILEEntity Basis – Reconciliation to Reportable Segments – FFO

1. Includes $19 million of BPY preferred share distributions2. FFO excludes $36 million (2016 – $33 million) of preferred share distributions for the three months and $136 million (2016 – $133 million) for the last twelve months, which are included in determining

per share results

31

Reconciling items Eliminate Realized

FOR THE THREE MONTHS ENDED(MILLIONS)

Non-FFO Intersegment Disposition IFRS Items Adjustments Gains FFO

Revenues $ 5,218 $ — $ 277 $ — $ 5,495Direct costs (3,648) — (5) — (3,653)Other income and gains 35 — — — 35Equity accounted income 152 274 — — 426Expenses

Interest (767) — (6) — (773)Corporate costs (23) — (266) — (289)

Realized disposition gains — — — 193 193Fair value changes 352 (333) — — 19Depreciation and amortization (481) 481 — — —Income tax (202) 170 — — (32)Net income 636Non-controlling interests (379) (339) — — (718)Net income / FFO attributable to shareholders $ 257 $ 253 $ — $ 193 $ 703

Reconciling items Eliminate Realized

FOR THE THREE MONTHS ENDED(MILLIONS)

Non-FFO Intersegment Disposition IFRS Items Adjustments Gains FFO

Revenues $ 6,001 $ — $ 339 $ — $ 6,340Direct costs (4,387) — 18 — (4,369)Other income and gains 265 — — — 265Equity accounted income 335 122 — — 457Expenses

Interest (843) — (4) — (847)Corporate costs (25) — (353) — (378)

Realized disposition gains — — — 83 83Fair value changes (204) 273 — — 69Depreciation and amortization (499) 499 — — —Income tax (125) 108 — — (17)Net income 518Non-controlling interests (555) (374) — — (929)Net loss / FFO attributable to shareholders $ (37) $ 628 $ — $ 83 $ 674

March 31, 2016

March 31, 2017

RECONCILIATION OF NET INCOME TO FFO

32

This Supplemental Information contains key operating and performance measures that we employ in analyzing and discussing our results. These measures include non-IFRS measures. We describe our key financial measures below and include a complete list of our operating and performance measures on pages 40 through 42 of ourDecember 31, 2016 annual report.

• Funds from Operations (“FFO”) is our key measure of financial performance. FFO is defined as net income attributable to shareholders prior to fair value changes,depreciation and amortization, and deferred income taxes, and includes disposition gains that are not recorded in net income as determined under IFRS. FFO alsoincludes the company’s share of equity accounted investments’ funds from operations on a fully diluted basis. Brookfield uses FFO to assess its operating resultsand believes that many of its shareholders and analysts also find this measure of value to them.

FFO and its per share equivalent are non-IFRS measures which do not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. FFO is reconciled to net income attributable to shareholders on slide 31.

— FFO from Operating Activities represents the company’s share of revenues less operating costs and interest expenses; excludes carried interest dispositiongains, fair value changes, depreciation and amortization and deferred income taxes; and includes our proportionate share of similar items recorded byequity accounted investments. We present this measure as we believe it assists in describing our results and reconciling variances within FFO.

— Realized Carried Interest represents our contractual share of investments gains generated within a private fund after considering our clients minimumreturn requirements. Realized carried interest is determined on third-party capital that is no longer subject to future investment performance.

— Realized Disposition Gains are included in FFO as the purchase and sale of assets is a normal part of the company’s business. Realized dispositiongains include gains and losses recorded directly in net income or equity in the current period, adjusted to include fair value changes and revaluation surplusbalances recorded in prior periods.

• Invested Capital is the amount of common equity allocated to a business segment or business line within a segment. This measure is intended to present the netassets associated with FFO of the segment.

• Fee Revenues include base management fees, incentive distributions, performance fees and transaction and advisory fees presented within our asset managementsegment. Fee revenues exclude carried interest.

• Fee Related Earnings are comprised of fee revenues, less direct costs (other than carried interest's associated costs). • Base Management Fees are determined by contractual arrangements, are typically equal to a percentage of Fee Bearing Capital, are accrued quarterly, include

base fees earned on fee bearing capital from both clients and ourselves and are typically earned on both called and uncalled amounts.

OPERATING AND PERFORMANCE MEASURES

33

• Fee Bearing Capital represents the capital committed, pledged or invested in our listed partnerships, private funds, and public securities that we manage whichentitle us to earn fee revenues and/or carried interest. Fee bearing capital includes both called (“invested”) and uncalled (“pledged” or “committed”) amounts whenreconciling period amounts we utilize the following definitions:

— Inflows include capital commitments and contributions to our private and public securities funds, and equity issuances in our listed partnerships.

— Outflows represent expiry of private funds uncalled commitments.

— Distributions represent quarterly distributions from listed partnerships and private funds returns of invested upon asset dispositions or wind-up.

— Market activity includes gains (losses) on portfolio investments; listed partnerships and public securities based on market prices, and open-ended privatefunds based on valuation models.

— Other includes changes in net non-recourse leverage included in the determination of listed partnership capitalization and the impact of foreign exchangefluctuations on non-U.S. dollar commitments.

• Incentive Distributions are determined by contractual arrangements and are paid to us by our three primary listed partnerships (BPY, BEP and BIP) and representa portion of distributions paid by a listed issuer above a pre-determined threshold.

• Performance Fees are paid to us when we exceed pre-determined investment returns on certain portfolios managed in our public securities activities. Performancefees are typically determined on an annual basis and are not subject to “clawback” in future years.

• Carried Interest is contractual arrangements whereby we receive a fixed percentage of investment gains generated within a private fund provided that the investorsreceive a pre-determined minimum return. Carried interest is typically paid towards the end of the life of a fund after the capital has been returned to investors andmay be subject to “clawback” until all investments have been monetized and minimum investment returns are sufficiently assured. This is referred to as realizedcarried interest. We defer recognition of carried interest in our financial statements until they are no longer subject to adjustment based on future events. Unlike feesand incentive distributions, we only include carried interest earned in respect of third-party capital when determining our segment results.

• Unrealized carried interest is based on carried interest that would be receivable under the contractual formula at the period end date as if fund was liquidated andall investments had been monetized at the values recorded on that date. Carry generated refers to the change in unrealized carry during a specified period, adjustedfor realized carry.

• Annualized fees include annualized base management fees which are determined by the contractual fee rate multiplied by the current level of fee bearing capital,annualized incentive distributions based on our listed partnerships current annual distribution policies, annualized transaction and performance fees equal a simpleaverage of the last two years’ revenues.

• Annualized target carried interest represents the annualized carried interest we would earn on third-party private fund capital subject to carried interest on theassumption that we achieve the targetted returns on the private funds. It is determined by multiplying the target gross return of a fund, by the percentage carriedinterest, by the amount of third-party capital, and discounted by a utilization factor representing the average invested capital over the fund life.

OPERATING AND PERFORMANCE MEASURES (CONT'D)

34

Note: This Supplemental Information contains forward-looking information within the meaning of Canadian provincial securities laws and other “forward-looking statements,”within the meaning of certain securities laws including Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of1934, as amended, “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations.We may make such statements in this profile, in other filings with Canadian regulators or the Securities Exchange Commission (SEC) or in other communications. Theseforward-looking statements include, among others, statements with respect to our financial and operating objectives and strategies to achieve those objectives, capitalcommitted to our funds, our liquidity and ability to access and raise capital, our ability to capitalize on investment opportunities, the potential growth of our asset managementbusiness and the related revenue streams there from, the prospects for increasing our cash flow from or continued achievement of targetted returns on our investments,as well as the outlook for the Company’s businesses and other statements with respect to our beliefs, outlooks, plans, expectations, and intentions.

Although Brookfield Asset Management believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statementsand information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and informationbecause they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company todiffer materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: economic and financial conditionsin the countries in which we do business; the behavior of financial markets including fluctuations in interest and exchange rates; availability of equity and debt financing;strategic actions including dispositions; the ability to effectively integrate acquisitions into existing operations and the ability to attain expected benefits; adverse hydrologyconditions; regulatory and political factors within the countries in which the company operates; acts of God, such as earthquakes and hurricanes; the possible impact ofinternational conflicts and other developments including terrorist acts; and other risks and factors detailed from time to time in the company’s form 40-F filed with theSecurities and Exchange Commission as well as other documents filed by the company with the securities regulators in Canada and the United States including inthe Annual Information Form under the heading “Business Environment and Risks.”

We caution that the forgoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisionswith respect to Brookfield Asset Management, investors and others should carefully consider the forgoing factors and other uncertainties and potential events. The companyundertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information,future events or otherwise.

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Documents

2017 - Q1 Supplemental/media/Files/B/... · • Net loss attributable to Brookfield shareholders was $37 million or $0.08 per share, which is after the allocation of income to non-controlling